Saturday, 5 March 2016

All of Us Will Be Hit by The Fall-Out

George Osborne is facing the defining test of his six years as Chancellor.

In 11 days time, he will deliver the annual Budget — and I predict that he will have to make a violent U-turn in policy which threatens to leave his credibility in shreds.

It will see him reining back on the expansionary spending plan he announced in November, when he pumped an extra £27 billion into the British economy.

The fact is that Osborne has no choice but to slam on the brakes with an acrid stench of burning rubber. For he has been responsible for Britain plc accumulating a shockingly large national debt.

The big question is how much his inevitable about-face a week on Wednesday will damage his already frayed reputation.

As Gordon Brown used to remark about the hazards of the job, there are two types of Chancellor of the Exchequer: those who get out in time and those who don’t.

Beyond question, George Osborne belongs to the second category.

For when he delivers his Budget, he will have to concede that he has presided over the sixth consecutive year of increase in the national debt.

If he were honest, he would also admit that his previous prediction that the UK’s net borrowing would fall to £43 billion by 2017-18 is unattainable.

In addition, he would come clean and confess that as a result of his chancellorship, the national debt will have almost doubled — from under £1 trillion in 2010 to an expected £1.8 trillion or more by the next General Election in 2020.

To put such figures into perspective, £1.8 trillion is the equivalent to £68,000 for every household. The truth is that George Osborne has been the most profligate Chancellor in recent British history.

Despite being a Tory, his recklessness is of a scale that makes Gordon Brown (who sprayed vast amounts of money at Labour’s vested interest groups) look like a miser in comparison.

Since becoming Chancellor in 2010, Osborne has squandered taxpayers’ money. He has also added enormously to the burden of small businesses by imposing numerous petty regulations.

Indeed, a devastating pamphlet by the Centre for Policy Studies — due to be published on Monday — is expected to outline many examples.

Typical is the fact that under Chancellor Osborne, the handbook detailing Britain’s tax laws, Tolley’s Tax Guide, has increased by approximately five million words and now totals around ten million.

This means that Osborne’s fiscal changes have added six times as many more words as there are in the Bible!

The Chancellor’s latest problems date back to last year’s Tory election victory, after which he triumphantly announced plans to save about £4 billion a year through the abolition of tax credits — a cruel and politically maladroit measure that would have hit millions of low-paid workers.

Under the move, more than three million families would have lost around £1,300 a year.

Not surprisingly, this foolhardy measure was voted down in the House of Lords and a humiliated Osborne was forced to abandon it.

However, the Chancellor failed to learn from this debacle and proceeded to make another calamitous mistake.

He decided not to tackle the resulting hole in the Government’s finances by making the required expenditure cuts or imposing some judicious tax rises.

Any responsible custodian of the nation’s finances would certainly have done so.
Instead, Osborne took a gamble.

He hoped that strong growth in the British economy would provide the necessary extra revenues (in the form of an increased tax take accrued from boosted consumer spending, business profits and higher wages).

At the time, the Mail cautioned that such an imprudent policy risked ending in disaster. And so, tragically, it has proved.

The economic growth that Osborne promised has been a mirage.
Indeed, it seems that the opposite has happened.

Not only are we facing an economic slowdown, I can reveal that advisers at No. 10 fear Britain is heading back into a recession. Every official statistic points that way.

The Chancellor’s gamble is about to blow up in his face — and all of us will be hit by the fall-out.

As shadow Chancellor, George Osborne used to accuse his Labour rival Gordon Brown of ‘failing to mend the roof when the sun was shining’.

By that, he meant that Labour failed to pay off our debts during the long economic boom of the late Nineties and early years of this century.

Today, a similar charge can be laid at Osborne.

He has failed to use the past six years of growth to put Britain’s national finances in order.
And, indeed, they are in a far worse condition than they were under Gordon Brown.

The national debt (the amount owed by the Government) is three times higher, and the deficit (the difference between its everyday expenses and its revenues) is bigger, too.

But this failure comes as no surprise, because Osborne has been at best a part-time Chancellor — having devoted too much time as Britain’s chief negotiator on the future of the EU — another role he has fumbled.

As a result of Osborne’s negligence — about which the Mail has warned time and again — the Government is unprepared for the impending financial crisis.

I don’t wish to be a doom-monger, but I fear more hard times lie ahead. I believe that Osborne, too, is aware of the storm clouds.

Hence his frantic briefing, during his recent trip to China, to trusted media contacts about problems on the horizon.

As for the Budget, if he does not act and announce robust economies (which inevitably mean more cuts to public spending, which caused all the trouble in the first place) to show he’s capable of reducing the national debt, his boss, David Cameron must step in.

Do not rule out George Osborne being replaced and his successor being forced to go to the Commons later in the year with an emergency Budget to clear up the economic mess.

And:

Last week, a Downing Street spokesman was asked whether David Cameron would invite Donald Trump to Downing Street if he became U.S. President.

The spokesman replied: ‘Clearly, there is a special relationship with the United Kingdom and we would want it to continue to be so.’

This abject response illustrates the cringe-making subservience of successive British prime ministers to the White House.

It is outrageous that a British prime minister should even consider welcoming a racist like Trump, who flirts with the Ku Klux Klan, wants to ban Muslims from the U.S. and demands that terrorists’ families be killed — just to mention a handful of his recent appalling comments.

This poodle-like attitude to the U.S. was tested to destruction by Tony Blair, whose unquestioned loyalty to George W. Bush ended in catastrophic, never-ending bloodshed in the Middle East.

Why can’t Downing Street make it abundantly clear that it regards some of Donald Trump’s views as disgusting and that his election as President would be a calamity for the U.S. and a disaster for the rest of the world?

And:

Three cheers for John Longworth, director general of the British Chambers of Commerce, who has argued persuasively that the UK economy would benefit from Brexit.

Longworth is an experienced businessman and knows what he is talking about.

So it comes as no surprise at all that this principled man has been suspended from his job as a result. The pro-European lobby is utterly ruthless and will not tolerate dissent.

But for those of us whose priority is the well-being of British businesses and workers and not faceless corporate interests, Mr Longworth has suddenly become a true British hero.